Professional Documents
Culture Documents
ANALYSTS VISIT
Escondida Overview
Operations
Financial Overview
Business Strategy
Growth Opportunities
Marketing
Current Activities
Slide 2
Worlds Premium Copper Region
BOLIVIA
TOCOPILLA CHUQUICAMATA
CHILE
MEJILLONES
ANTOFAGASTA
COLOSO ZALDIVAR
Cerro Colorado MONTURAQUI
Quebrada Blanca
Collahuasi
ESCONDIDA
El Abra
ARGENTINA
Radomiro Tomic
Chuquica mata
Michilla Lince Spence TATAL
Andacollo El Indio
Los Pela mbres
El Soldado Andina
Slide 3
Escondida
Norte
Zaldivar
Aerial View
Leach Padsof MEL
Zaldivar
Pit
Concentrator
Main
Pit
Oxide Hamburgo
Leach Pads Tails
N
Phase IV 5 km
Slide 4
Plant site
Facilities Layout
CMZ
Property
Limit
E. Norte
Waste Dump
Limit
Northern
Waste
Dump Limit E. Norte Pit
Ultimate
Limit
Main Pit
Ultimate
Limit
Hamburgo
Waste Dump
Phase Limit
IV Plant N
site
5 km
Slide 5
Coloso Filter & Port
World
Worlds
Worlds
Largest
Largest
Strong
Strong Copper
Copper Mine
Mine Strong
Strong Cash
Cash
Credit
Credit Flow
Flow
Ratings
Ratings
Strong Low
Low Cost
Cost
Strong
Sponsors Producer
Producer
Sponsors
Diversified
Diversified Stable
Stable
Sales
Sales Base
Base Country
Country
Ability
Ability to
to Unequalled
Unequalled
Manage
Manage Resource
Resource
Expansions
Expansions High
High Quality
Quality
Concentrate
Concentrate
Slide 7
Worlds Largest Copper Mine
L ead ing C op per M ine Sit es
Lea ding Coppe r P ro ducers C ompa nies
E sc on d id a L a gu n a S e ca C ode lc o
BH P Billiton
C hu q u ica m a t a
KG HM P o lish Ph elps D od ge
Cu
R io Tint o
E l T en ie n te
Grupo M exic o
M o re n ci
F-M cM Co ppe r &
Gold
L o s P e la m b re s
An glo Am erica n
Co lla h ua s i plc
KGH M P olska
Mie dz
Ba t u Hija u
M IM H olding s
Ra d o m iro
To m ic
A nto fag asta plc
B ing h a m
Ca n yo n
S PC C
An d in a
Slide 8
Sponsored By Worlds Premier Metals & Mining Houses
Mitsubishi Corporation 60% International Finance
BHP Billiton Limited Rio Tinto Plc Mitsubishi Materials Corp 20% Corporation
100% 100% Nippon Mining & Metals Co Ltd 20% 2.5%
Owners Council
Slide 9
Unequalled Copper Resource
Ore Head Grade s Against Copper in Concentrate Production
2.100
E scon dida w ith
Ca thod es
1.900
Copper in Concentrate ( Payable in Mlbs)
PT Freep ort
1.700
E sco nd id a
1.500
1.300
1.100
900
Ba tu Hijau L os P elam b re s
700 Co lla hua si
Bingh am Ca nyon Ca nde laria
500 Ok Tedi And in a
High la nd Valley
Los Bronces
Alu m brera Cua jone s
300
100
0,00 0,50 1,00 1,50 2,00
Head G rade (% )
Slide 11
Copper Production & Head Grade
Tonnes milled (00 000) Production (Cu Contained) (kt) Headgrade (%)
3.00%
1,000
2.50%
800
2.00%
600
1.50%
400
1.00%
200
0.50%
0 0.00%
FY91 FY92 FY93 FY94 FY95 FY96 FY97 FY98 FY99 FY00 FY01 FY02 FY03 FY04
YTD
Slide 12
Concentrate Grade Long Term:
Historic Annual Copper in Concentrate (All Production)
46%
44%
42%
Concentrate Grade (%Tcu)
40%
38%
36%
34%
32%
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
Fiscal Years
Slide 13
Escondida Schematic Deposit Evolution Profile:
Increasingly complex & variable geological conditions
variability
1991-1997 1998-2010
Cu - Fe Oxides
cc
cc+cv+cp+py
cp + py
>2010
py >> cp
Slide 14
Ore-Related Concentrate Grade & Quality Drivers
Copper Mineralogy
Chalcocite to chalcopyrite ratios decrease with depth
Pyrite Content
Increasing pyrite content over last several years
Sulfide-Sulfide and Sulfide-Gangue Intergrowths
Dependent on alteration, lithology, and degree of enrichment
Trace Element Geochemistry
Zonation of trace and minor elements within ore deposit
Elements such as Ag, As, and Cd contained within copper sulfides,
with high recovery
Slide 15
Phase IV Expansion Components
An additional mine fleet
(1) 65 yd 3 shovel, (6) 380 st haul trucks, (1) drill
Support equipment and maintenance shop expansion
In-pit ore crusher and conveyor to Phase IV concentrator
Relocation of existing crushers
110,000 tpd Concentrator
38-ft. SAG mill and (3) 25-ft. Ball mills
Conventional flotation using large cells, regrind, column cells
Concentrate handling
Slurry pipeline to existing concentrator, then on to the port
Added concentrate filtering and storage capacity
Modifications to port facility
Laguna Seca Tailings Facility
Tailings disposal for life of mine both mills
Improved water reclaim to both mills
Slide 16
Phase IV: Laguna Seca Concentrator:
Detailed Site Layout
Slide 17
Presentation Content
Escondida Overview
Operations
Financial Overview
Business Strategy
Growth Opportunities
Marketing
Current Activities
Slide 18
Escondida Organisational Structure
President (A)
MEL
Kevin O'Kane
VP VP
External & Corporate Affairs Human Resources
Mauro Valds Mark Stone
VP VP
Mine Finance
Larry Hartley Alfredo Atucha
VP (A) VP
Process Operations Services
Frank Cappelli Jorge Muoz
Manager
Health & Safety
Hans Sandoval
Slide 19
Employment
Antofagasta Coloso Escondida Santiago Total Mel
Expatriates 2 0 11 0 13
Operators 0 70 1.698 0 1.768
Technical & Admin. 21 0 100 0 121
Professional/Mgrs 49 17 475 10 551
Total 72 87 2.284 10 2.453
Slide 20
Safety Lost Time Frequency Rate (LTIFR)
5.00
4.54
4.50
4.00 3.77
3.43
3.50
2.81
LTIFR per mmh
3.00
2.50
2.00
2.00 1.65
1.50
1.50
1.00
1.00
0.50
0.00
1998 1999 2000 2001 2002 2003 2004 YTDA 2004
YTDB
Fiscal Years
Slide 21
Dimensions Now Final
E-W 2.2km 3.5km
Escondida Mine Pit
N-S
Minera Escondida
3.2km
Ltda.
4.8km
Depth 465m 750m
Slide 22
Escondida Mining Fleet FY-04
Drills Total 15
- BE 49R R2s (8), IR D MM2s (2), DM45 (2), C M780 (1) & P&H 250XPs (2)
Slide 23
Mine Production 000s TPD Ex-Pit
1000
901
900 835 858
814
800
725
678 681
700
'000s Tonnes per Day
600
500
400
300
200
100
0
1998 1999 2000 2001 2002 2003 2004
Fiscal Years Histor y YTD
Slide 24
Los Colorados Concentrator
Slide 25
Laguna Seca Production 000s TPD Milled
100
90
80
70
'000s Tonnes per Day
60
50
95
40
30
51.5
20
10
0
2002 2003 2004
Fiscal Years Histor y YTD
Slide 26
Concentrate Grade Ex-Coloso - % Cu Contained
45.0%
40.0%
35.0%
Concentrate Grade % Cu
30.0%
25.0%
10.0%
5.0%
0.0%
1998 1999 2000 2001 2002 2003 2004
Fiscal Years Histor y YTD
Slide 27
Coloso Port 000ts Concentrate Shipped
2500
2000
'000s Tonnes Shipped
1500
500
0
1998 1999 2000 2001 2002 2003 2004
Fiscal Years Histor y YTD
Slide 28
Copper Production 000ts Cu Contained in Concentrate
1000
900
800
'000s Tonnes of Cu Contained
700
600
500
200
100
0
1998 1999 2000 2001 2002 2003 2004
Fiscal Years Histor y YTD
Slide 29
Oxide Production 000s Tonnes of Cathodes
160
140
120
100
'000s Tonnes
80
150.7 145.1 150.5
136.7
60 113
40
56.4
20
0
1998 1999 2000 2001 2002 2003 2004
Fiscal Years Histor y YTD
Slide 30
Copper Production 000ts Cu Contained
1200
996
1000
860 894 871 892
151
56
'000s Tonnes of Cu Contained
0
1998 1999 2000 2001 2002 2003 2004
Fiscal Years Concentr ate Cathodes Total
Slide 31
Presentation Content
Escondida Overview
Operations
Financial Overview
Business Strategy
Growth Opportunities
Marketing
Current Activities
Slide 32
C1 Unit Costs in the 1st Quartile
Estimated 2003 Brook Hunt, Copper Industry C1 Cost Curve
125
C1 Cash Operating Cost (US c/lb)
100
75 Esc ondida
50
25
0
0 5000 10000 15000 20000 25000
Cumulative Production (Payable in Mlbs)
Slide 33
C2 Unit Costs
Estimated 2003 Brook Hunt, Copper Industry C2 Cost Curve
150
C2 Production Cost (US c/lb)
125
100
Es condida
75
50
25
0
0 5000 10000 15000 20000 25000
Cumulative Production (Payable in Mlbs)
Slide 34
Only 3 Producers with a Lower C3 Unit Cost
Estimated 2003 Brook Hunt, Copper Industry C3 Cost Curve
175
150
C3 Production Cost (US c/lb)
125
100
Escondida
75
50
25
0
0 5000 10000 15000 20000 25000
Cumulative Production (Payable in Mlbs)
Slide 35
STRATEGIC KEY ELEMENT NPV
Optimize Escondidas Net Present Value
We will optimize NPV by:
Taking a leadership role within the industry and adopting a flexible
production profile
Continually focusing on cost reduction
Leveraging Six Sigma and the Maintenance Improvent Programs
Using tollgating to improve our Capital Productivity
Capturing the synergies of both concentrators
Leveraging leach technologies
Taking a leadership position in the responsible management of the
use of fossil water; 10% reduction in water requirements
Slide 36
STRATEGIC KEY ELEMENT PEOPLE
Slide 37
STRATEGIC KEY ELEMENT CUSTOMERS
Slide 38
Presentation Content
Escondida Overview
Operations
Financial Overview
Business Strategy
Growth Opportunities
Marketing
Current Activities
Slide 39
Sulphide Leach Project Summary
60-100 Mtpa @ 0.6% TCu
1.6 billion t sulphide ore at 0.6%tcu
raffinate Current stockpile 100mt
Copper recovery by:
Air
ROM leaching
Solvent extraction
Solvent Extraction
Electrowinning
180-245 ktpa cathode
Electrowinning
Expected recovery 36%
Crush & Leach + Sulphide/ROM Leach Operations
EW Copper Production
Approx 50% of Cu is chalcopyrite
Initial copper production 180 ktpa
350
300
250
EW Capacit y with ROM Le ach
Increasing to 245 ktpa as ore supply
increases and oxide T/H capacity
Sulph id e/ROM Leach
EW Copper Production - kt
Crus h Leach
becomes available
200 Crush Leach E W Cap acity
150
100
Initial capital $ 870M (incl. water supply)
50
Operating costs < $0.35/lb Cu
-
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
Fiscal Perio d
Slide 40
Bioleaching Technology
Sulphide leaching requires ferric iron as oxidant
Conversion of ferrous iron to ferric is catalyzed by bacteria
Without bacteria, leaching is slow due to lack of ferric iron
Main bacteria are mesophiles such as thiobacillus ferrooxidans
Mesophiles occur naturally in ore and thrive in acidic conditions at
temperatures from 20-40C
Bacteria require oxygen as does the oxidation reactions
Forced aeration is key for high bacterial activity and fast leaching
The process is simple and robust
Slide 41
Presentation Content
Escondida Overview
Operations
Financial Overview
Business Strategy
Growth Opportunities
Marketing
Current Activities
Slide 42
Diverse Customer Base
COPPER CONCENTRATE SALES BY DESTINATION - 2003
Merchants China
Germ any
7.3% 6.1% India
8.0% Brazil
4.1% 3.3%
South Korea
Sw eden
8.9% Philippines
3.4%
3.0%
Spain
2.8%
Other
14.3% Bulgaria
2.7%
Chile
South Africa
22.1%
1.6%
Iran
0.4%
Japan
Finland
25.8%
0.4%
Slide 43
Diverse Customer Base
CATHODE SALES BY DESTINATION - 2003
Spain UK
3.0% 2.0% Turkey
Canada
0.8%
3.6%
Chile
Intermediaries / BMAG
4.2%
21.9%
Italy
5.9%
Brazil
6.7%
Germany
12.5%
Japan
8.2%
Taiwan France
8.5% South Korea 11.8%
10.8%
Slide 44
Presentation Content
Escondida Overview
Operations
Financial Overview
Business Strategy
Growth Opportunities
Marketing
Current Activities
Slide 45
Water Issue
Slide 46
Water Issue - How MEL is solving the water problem
Slide 47
Action Plans HSEC
Slide 48
Action Plans NPV
Slide 49
Action Plans PEOPLE
Slide 50
Action Plans CUSTOMERS
Eliminate backlog of concentrate deliveries arising from Apollo cuts
Complete Sales Book restructuring
Reduced sales to Merchants
Increase sales to emerging smelter markets, eg., India and
China
Initiate spot sales
Continue to push transition to global market terms for concentrates
Close cooperation with Escondida Operations to address concentrate
grade reduction and variability issues
Slide 51
Head Grade - % Contained Copper
3.0%
2.5%
2.0%
Head Grade % Cu
1.5%
2.75%
2.22%
1.0% 1.95% 1.89%
1.69% 1.54%
1.37%
0.5%
0.0%
1998 1999 2000 2001 2002 2003 2004
Fiscal Years History YT D
Slide 52
Oxide Flowsheet
CRUSHING &
PRIMARY STOCKPILE SCREENING
ORE
CRUSHER
RAFFINATE
CONVEYING SYSTEM
PLS
EXTRACTION LEACH PAD
AGLOMERATION
ORGNIC ORGNIC
RECOVERY
WASHING
SOLVENT
EXTRACTION
WATER
COPPER CATHODES
SULFRIC ACID STRIPPING
150.000 TPA
RICH ELECTROLYTE
LEAN ELECTROLYTE
ELECTRO-WINNING
Slide 53